Monday, January 14, 2013

Back in 2010, the National government agreed to subsidise The Hobbit films. So how many jobs did that subsidy create? They have absolutely no idea:

The Government is being accused of fabricating the number of jobs created by The Hobbit films following its $67 million subsidy to Warner Brothers.

The claim comes after correspondence between Prime Minister John Key's office and Hobbit director Sir Peter Jackson's Wingnut Films was released to New Zealand First under the Official Information Act.

[...]

The correspondence does not say 3000 jobs had been created - only that 3000 people was "a good number" for those working on the films.

In June last year, Key said in a statement: "The Government has actively supported the filming of The Hobbit movies in New Zealand because of the enormous economic benefits they're bringing to the country, including the creation of around 3000 jobs."

New Zealand First leader Winston Peters said the documents showed nobody had any idea how many jobs had been created by the Government's subsidy to Warner Brothers.

The first thing you do when giving money to create a supposed economic benefit is to quantify that benefit, so you can decide whether it is actually a good idea. The second thing you do is check it after the fact to see whether the projection was correct, and whether that benefit actually eventuated. Key appears to have done neither. Instead, his numbers are pulled out of the arses of his spindoctors, predicated on an apparent belief that all of those people at Weta were employed solely for the Hobbit, and wouldn't be making other movies if they weren't making this one - something which is demonstrably false.

Meanwhile, the bigger question remains unaddressed: this movie - the first of three - has already made over a billion dollars. Its is hugely profitable, and would have been so without Key's $67 million gift. The economic benefit would have existed anyway. So why were we subsidising it again?